While working at the Disney studio, Don Bluth, Gary Goldman
and John Pomeroy began working at Don's garage on private
projects. These were initially exercises to re-learn some of the
techniques of the past. Using their salaries and exercising
their stock options they purchased a number of pieces of
equipment including a movieola.

These weekend workouts saw almost everyone at the Disney
studio drop by. If they felt invigorated, they stayed. If they
wanted to go other directions they never came back. Don saw this
as a good weeding out period helping him locate talent that
agreed with his vision.

Eventually the crew began working on a real project rather
than just recreating scenes from Disney. The first to be worked
on was "The Piper" based on the Pied Piper story retold by Don's
brother, Toby (Fred) Bluth. (Toby later went into children's
book illustration, as well as a character and layout designer in
animation. He even went into stage design for live theatrical
productions.) After some work had been done, it was decided that
"The Piper" would be too large of a production for the small
studio.

The second project was BANJO. It began as an idea for a
possible TV special or featurette. As work continued it shifted
direction many times. When Don and his crew felt that they
finally had it locked down, they took it to Disney's Ron Miller
and offered it as a future property. Miller saw no value in it
and turned it down.

Undaunted they continued on the project and began looking
for a new outlet. Around 1977, they met Mel Griffin, a former
executive of Schick. He was brought on board as Production
Executive to assist the trio in their business affairs.

As the Seventies were ending, there seemed to be a slight
growing interest in animation. Disney's own publicity, as well
as the success of THE RESCUERS had assisted in creating this
situation. Several studios and producers announced animated
feature projects.

Ralph Bakshi, who had been successful with the X-rated FRITZ
THE CAT was working on LORD OF THE RINGS. WATERSHIP DOWN
received generally good critical reaction and did well at the box
office. Others began looking at animation as a possible money
making film proposition.

One group was Aurora Productions. This organization had
been recently formed by several ex-Disney executives including
Richard Irvine (a former president of Disney's educational media
company), James Stewart (a former executive vice president of
corporate relations) and Jon Lang (a former Disney distribution
executive). They began casual talks with Don and the idea of a
feature began to formulate.

At the same time, Don was beginning to get interest in
BANJO. ABC agreed to purchase the TV rights. With this money,
the belief of a feature, and a growing dissastifaction with
Disney, Don, Gary and John began to plan their exit.

The date chosen was September 17th, Don's birthday. The
three announced their resignation and left. The next day another
eight left: Lorna Pomeroy, Heidi Guedel, Linda Miller, Emily
Juliano (all animators), Frank Jones, Dave Spafford, Vera Law and
Sally Voorhees (assistant animators). On the 20th, Diane Landau
resigned.

Even Don was surprised the effect the walkout had. Besides
the obvious production delays on THE FOX AND THE HOUND, the
walkout became a major media event. Animation, which seldom
received any coverage was first page news from the The Hollywood
Reporter to the Wall Street Journal to local dailies.

The first reports were in the industry papers, The Hollywood
Reporter and Daily Variety. The Reporter headlined "12 animators
at Disney quit to join with Aurora." The front page article
merely mentioned the event and stated the new production would be
MRS. FRISBY AND THE RATS OF NIMH.

Variety was a bit more sensational with "Disney Loses A Big
Chunk Of Its Animation Dept." This front page story detailed
more information, including listing the names of the other eight
defecting animators. It discussed more about the reasons for the
walkout. Bluth is quoted as saying "We did not tell the studio
why we left." However he goes on in the article to state "I was
hoping the good old days could be revived... and it turned into a
lot of politics and fighting. Egos were just everywhere." He
concluded by stating "It became intolerable to work under the
current administration. They don't understand the creative side.
Walt did, but they didn't."

Ron Miller, then head of the studio, was equally blunt
telling the trade "those animators that remain are still the
creative backbone of the company." As for those who exited,
"Some of them I respect... Some I wouldn't have back. Some will
be back."

With Disney's live action films hitting an all time low in
box office, and the theme parks still recovering from a rough
period due to the various oil shortages of the Seventies which
curtalied attendance, their attempt to re-build animation was
seen as key to the company. Disney may have moved into a number
of different businesses, but animation was still its central
force and image.

"Disney Is Dealt Blow by the Resignations of 11 Animators to
Start Production Firm" was the front page headline of the Wall
Street Journal on September 19, 1979. The report discussed
Disney's announced delay of THE FOX AND THE HOUND from a
Christmas 1980 release to a summer 1981. The Journal found the
move a "blow" since "the company's theme parks and many other
activities are based on creations of its animators. In recent
years the company has spent considerable time, effort and money
to rebuild its animation department which has been depleted by
retirements."

The paper quoted Ron Miller as saying the Bluth defection
equaled around "17% of the total department." He also was quoted
as saying the defection was "possibly the best thing that could
happen to our animation group but that the timing was bad."

(Years later, animator Glenn Keane would agree with Miller's
initial statement. In a 1981 New York Times article, Keane
stated, "To tell the truth, it was a relief when they left. The
rift developed during the making of PETE'S DRAGON and carried
over to THE FOX AND THE HOUND, and it caused a lot of
conflicts.")

The New York Times picked up the story the next day
reporting that "A severe blow was struck at Walt Disney
Productions' animation department last weekend when 11 members -
over 15 percent of the department - resigned to form a rival
company." The paper cited disputes over "training practices and
artistic control" as being key to the walkouts.

Don stated "The creative working atmosphere at Disney's had
changed subtly but greatly in recent years. There were too many
committee decisions. Everything got done by vote. In addition,
people can't be left in a room to teach themselves how to become
animators. There is a sincere desire on the part of Disney to
perpetuate the art of animation, but the studio wasn't
**teaching**. On THE SMALL ONE, I was desperately trying to make
people come up to the quality we needed. Several others felt as
I did, and we decided not to keep making life miserable for the
[Disney] studio."

Miller again stated his relief over the exodus. "The
atmosphere and the climate here in the last few days have been
wonderful. It's like getting rid of a thorn. They complain of
our training program, but, if it hadn't been for our training
program, Mr. Bluth wouldn't have had all those trained people to
go with him."

Miller even got a little philosophical on the subject. "The
same thing happened to Walt twice. And it's going to happen
again. We develop the finest artists in the world. It's typical
of artists to want to spread their wings."

Eric Larson, one of Disney original Nine Old Men was quoted
at the time as stating, "In no way do we stem people's
creativity, but we can't possibly influence young people to the
degree that Walt influenced us. Walt had such a tremendous ego
he could weld us into a team. I think young people today lack a
certain discipline. It's a problem for them to become a cog in a
team effort. But this place is so far ahead of any place else
that I welcome competition. It's what we need."

One point picked up by most reports was the fact that the
walkout took **all** of Disney's female animators at the time.
Don explained this in one report. He said the women left "out of
a certain loyalty to me and because the atmosphere at Disney is
sometimes oppressive to women. For years, women have been
assistant animators there, but they've rarely let them get
higher."

Over a month later, the press was still fascinated by this
battle in the house of Disney. Of most interest were various
comments by Don about the problems in the original mouse house.
Don obliged with his opinions of Disney animation management and
talent.

"Their creative atmosphere has disappeared." stated Don
about Disney management. "Their thinking is more toward
marketing than product - more business than art."

Another article had Don discuss other changes. "I found it
was difficult for creativity to happen. Why not the best? But
they weren't trying for the best. They always settled for the
weakest people and paid the lowest salaries." In the same
article he also stated "The young people were hard to teach.
They were not the hungry, eager artists that came to Disney in
the Thirties. The new bunch were arrogant. They refused to
listen and got mad if you tried to press them. You'd explain a
drawing to them, then look around and see they had wandered off."

Still another found him talking of his last work at Disney
on THE FOX AND THE HOUND. "We felt like we were animating the
same picture over and over again with just the faces changed a
little. In contrast, Walt always found something new to delight
an audience. For example, they've gutted all of the meaning from
THE FOX AND THE HOUND. It's become a cute story instead of a
meaningful one."

Financial analysts continued to discuss the effect. The New
York Times re-tackled the situation in an article on October 9th
headlined "Animators' Loss Shakes Disney." It again told how the
Disney studio relied heavily on the presence of animation. "Walt
Disney Productions, one of Wall Street's premier growth stocks,
remains a money machine, with low debt and high liquidity. But
success has exacted its price, industry analysts say. Disney's
enormous expansion since the 1960's - the theme parks in
California and Florida (and next in Tokyo in 1983), the
television series and the 'live-action' features - have meant the
neglect of animation." The article went on to state delays in
animated production, caused by the walkout, could cost the Disney
company over $50 million in film revenues that year.

Meanwhile, Don finished up work on BANJO at his garage and
quickly moved to larger facilities in Studio City in 1980. The
two-story building was located behind a bank on Ventura
Boulevard. At this time Don Bluth Productions formed an
exclusive association with Aurora Productions.

More than at Disney, Don became a beacon to animation
enthusiasts around the world. Whereas Bakshi had promised to
move animation forward, Don promised to return the art form to
its classic look. The studio become deluged with people wanting
to work on the new projects. The tight budget meant that wages
could not be high, but the artists didn't care. Many would have
probably worked for free.

To assist these new faces, the studio began holding in-house
training sessions. Similar to Disney, this was a way to speed up
the process of gathering the skills for animation. Successful
trainees were assimilated into staff positions as they were
ready. These many lessons were videotaped, according to early
press releases, for future use and reference.

It was a year of frenzied activity for the Bluth group.
They finished BANJO, moved to new quarters, created an animated
music video segment for XANADU and continued production on THE
SECRET OF NIMH.

There was an excitement and enthusiasm not seen in animation
in possibly decades. Don's crew worked seven day weeks, ten and
twelve hour days, with no overtime! Every worker was committed
to making the film the best ever created. After years of
management dictating to animation, now the animators were in
charge.

This situation intrigued the media. They kept close tabs on
the new studio. Almost a year after the walkout, animation
historian Charles Solomon checked in at the studio and reported
"There is a stimulating sense of mission at the Bluth offices in
a two-story building, tucked behind a bank on Ventura Boulevard.
It's not simply the $7 million that is at stake, it is the
possibility of full-length animation, a gravely endangered art
form not only because of the time and costs involved but also
because of audience disenchantment with some recent cartoon
features (of which there were, of course, only a handful to begin
with)."

Solomon's story also showed how Don had begun turning away
from his strong anti-Disney stance. He would now start settling
into his role as lover and guardian of classical animation. Don
told Solomon, "Something has to happen to keep animation from
dying. Television could help if it would pay more money for
better animation, but it won't. Now there are just Disney and us
and the TV stuff, and young people are discouraged from entering
the field. This animated feature **must** succeed. Anytime one
fails it kills us all. If this one succeeds, it'll open doors
for all of us."

After viewing some artwork and listening to voice tracks,
Solomon was impressed with the prospective feature. He concluded
by stating, "Disney's loss, which it will survive, is animation's
gain, and already there is a want-to-see picture for 1982."

It would be a major turning point for Don, the animation
industry, the Bluth workers, Steven Spielberg (more on that
later), Disney and the media in general. Not since Mickey would
so much rest on a mouse.